FOCUS: Foreign investments in U.S. soaring thanks to IRA – especially from Europe
With bipartisan agreement finally reached on the debt ceiling, the threat of the U.S. either defaulting on its debts or repealing Inflation Reduction Act investments and tax credits responsible for driving a mammoth economic boom is behind us – at least for now.
That’s good news for the nearly 200 major clean energy and clean transportation projects and factories announced since the IRA’s passage – including 13 just last month – that suddenly faced uncertainty when the IRA was tossed around as a debt ceiling bargaining chip.
And it’s also good news for foreign companies which continue to reap benefits from investing in America. Nearly half the clean energy projects announced in May – including the majority of all expected new jobs – came from companies based in Europe.
It’s the kind of race to the top where everyone wins.
But what does all this international competition mean? America’s clean energy economy is vital to global economic growth, and in many industries helping decarbonize the world, the U.S. has staked its claim as a global leader.
Norwegian hydrogen electrolyzer manufacturer Nel, for instance, announced a $400 million project in Michigan. “I can tell you as a European, [the IRA] does work,” CEO Håkon Volldal said at an investment summit covered by the Detroit News. “Some of our largest orders are now coming from the United States, and we as a supplier want to be close to our customers.”
Other European companies announcing new U.S. projects last month include Italian energy giant Enel’s $1 billion solar manufacturing facility in Oklahoma (the largest single investment in the state’s history); a Portuguese company that plans to manufacture steel tubing for the solar industry in Tennessee and a Spanish electrical engineering business that credited federal EV provisions with its decision to expand a 140,000-square-foot production facility in Milwaukee.
Europe had a big month for investment in the U.S. clean economy, but since it was signed into law last summer, the IRA has attracted investments from around the world. Just look at Toyota’s $2.1 billion investment expanding EV manufacturing in North Carolina, or South Korea-owned QCells’ $2.5 billion investment to build a new solar manufacturing plant in Georgia.
Not long ago, America was exporting jobs to other countries; now, foreign companies are investing here, in clean energy, in clean transportation and in American workers.
Members of Congress should recognize that the clean energy revolution spurred on by the IRA – and the steady stream of foreign investments it’s attracting to America – is making our country more competitive in the industries that will drive global economic growth for decades to come.
Owner/Chief Energy Engineer
What does your company do?
We evaluate how energy is used in homes and make recommendations for how to be more energy efficient. We send crews to homes to implement the improvements we’ve identified, whether it’s updating insulation or installing a new heat-pump system that uses electricity instead of natural gas to heat a home.
How many homes have you upgraded so far this year?
Ecotelligent Homes has upgraded thousands of homes in metro Detroit over the past 13 years. It’s hard to come across a client who doesn’t want to make improvements that lower their utility bill and make their house more comfortable. After all, it’s important to have a warm house in the winter and a cool house in the summer!
Have you been hiring more staff?
Yes. We have three full crews of 15 people on staff and we’re hiring more. We’ve already added four new staff members and plan to add at least three more before the end of this year. I bring people onto my team who have never swung a hammer before, but through this work, they enter meaningful careers where they can make tangible impact in our clients’ lives.
How has the IRA impacted your company?
My company started as a side hustle more than a decade ago when I was still a mechanical engineer in the auto industry. We’ve steadily grown since 2009, but when the clean energy tax credits were passed by Congress last summer in the Inflation Reduction Act, I’ve been getting a lot more calls from old and new clients asking how they can benefit. The stability of the federal investments through the IRA and the longevity in the nation’s focus on a clean energy future is really driving much more demand from homeowners who want to invest in energy efficiency and renewable energy upgrades.
Does the IRA help your company overcome any obstacles to growth you had been encountering?
For lots of people, the upfront cost of home energy efficiency improvements can still be a barrier. That can be true even if you know you will get your money back over time through lower utility costs. For these homeowners, federal tax credits and rebates make a world of difference. As home energy upgrades become more accessible to more people, the industry will grow – and along with it, jobs.
Big companies have been attracting lots of attention for major announcements in Michigan. What’s happening with the IRA and small businesses in your state?
Huge investments are making headlines for all the great jobs they promise to create in electric vehicles, batteries and chip manufacturing. But I think what is being missed are the thousands of skilled trades jobs that the IRA investment is also helping to support at smaller employers like us. It’s really giving smaller employers the confidence to grow. Over the next five years, we’re projecting even more growth. To support small business, Michigan lawmakers should keep moving full-steam ahead toward a clean economy – and at the same time push back hard against any efforts to roll back the clean economy incentives passed last year.
Biden-Harris administration makes historic, $11 billion investment to advance clean energy across rural America through investing in America agenda
The Biden-Harris Administration announced the availability of nearly $11 billion in grants and loan opportunities that will help rural energy and utility providers bring affordable, reliable clean energy to their communities across the country. This represents the single-largest investment in rural electrification since President Franklin D. Roosevelt signed the Rural Electrification Act into law in 1936. Read more.
DOE announces $187 million to ensure widespread and accelerated electrification of America’s transportation sector
The U.S. Department of Energy (DOE) today announced a new $99.5 million funding opportunity in addition to the selection of 45 projects totaling $87 million to advance production of next-generation electric vehicle (EV) technologies, train the future electrified transportation workforce, and ensure the equitable deployment of clean mobility options in disadvantaged communities. Read more.
$45 million funding opportunity to advance tidal and current energy development
DOE released funds to advance a comprehensive approach to tidal and current energy development in the U.S. Up to $35 million will support development of a pilot tidal and/or current energy technology demonstration site in state waters, and up to $10 million will support a community-led tidal and/or current energy planning and development project. Read more.
Wind energy funding for offshore wind Centers of Excellence
EERE’s Wind Energy Technologies Office released a $4.75 million funding opportunity that will create one or more university-led Centers of Excellence to increase offshore wind expertise at U.S. universities; develop partnerships to address key offshore wind development challenges; and educate the next generation of offshore wind experts in the United States. Read more.
Workshop (June 14): Creating Good, Inclusive Clean Energy Jobs
DOE is seeking stakeholder input about a potential workforce program aimed at ensuring that historic investments in clean energy result in high-quality, accessible careers. Join this virtual workshop to learn about the program concept and discuss ideas about the quality of jobs in the growing field of clean energy development. Read more.
DOE launches new ‘Energy Earthshot’ to decarbonize transportation and industrial sectors
Energy Secretary Jennifer M. Granholm announced the launch of the Clean Fuels & Products Shot, which aims to significantly reduce greenhouse gas (GHG) emissions from carbon-based fuels and products critical to our way of life. This is the seventh DOE Energy Earthshot, and it focuses on reducing carbon emissions from the fuel and chemical industry through alternative, sustainable sources of carbon to achieve a minimum of 85 percent lower GHG emissions compared to fossil-based sources by 2035. Read more.
DOE invests $26 million to support clean energy grid
As part of President Biden’s Investing in America agenda, DOE announced $26 million for eight selected projects across 13 states and Puerto Rico to demonstrate how solar, wind, storage and other clean energy resources can support a reliable and efficient U.S. power grid. Read more.
DOE announces nearly $60 million to advance clean hydrogen technologies and improve the electric power grid
The U.S. Department of Energy announced nearly $42 million in funding for 22 projects in 14 states to advance critical technologies for producing, storing and deploying clean hydrogen. DOE also announced $17.8 million to establish a new North American university research consortium that will help states and tribal communities implement grid resilience programs and achieve decarbonization goals. Read more.
MAY CLEAN ENERGY ANNOUNCEMENTS
In MAY, E2 tracked 13 project announcements across nine states that are expected to drive at least $5 billion in private-sector investments and create at a minimum 2,900 jobs.
|Electric Hydrogen Co
MSS Steel Tubes
|alpitronic Americas LLC
ABOUT THIS ANALYSIS
This analysis is based on publicly available information for new clean energy projects, expansions, and renewed productions only announced since the Inflation Reduction Act (IRA) passed on August 16, 2022. Projects that began development, were proposed, or applied for local and state approval before the passage of the IRA are not included. For more information on other projects that stand to benefit to benefit from clean energy investments in different ways, see other resources below from the White House, Climate Power, the Climate Action Campaign, American Clean Power, and Energy Innovation.
Investing in America | Invest.gov | Interactive map that illustrates the impact of these record-breaking levels of public and private investment across states and territories under the Biden Administration.
Clean Energy Projects Tracker | ClimatePower.us | Climate Power’s analysis includes public announcements of clean energy developments that have been proposed, launched or advanced since the passage of the Inflation Reduction Act (IRA).
Climate Wins Here Map | ActOnClimate.com | Interactive map off federal investments made in nationwide through the IRA and Infrastructure Investment and Jobs Act.
Clean Energy Investing in America | CleanPower.org | Analysis of utility-scale clean energy investments announced since August 16, 2022.
Federal Clean Energy Tax Credit Benefits By State | EnergyInnovation.org | Analysis of potential state-level benefits from the IRA on economic growth, jobs, and public health in the 48 contiguous states, focusing on clean electricity and clean vehicle tax credits.